Religiosity vs. well-being effects on investor behavior

Paul-Olivier Klein, Rima Turk, Laurent Weill

Research output: Contribution to journalArticlepeer-review

15 Citations (Scopus)
24 Downloads (Pure)


Does religiosity impact the trading of securities in financial markets? We separate two channels that could affect investor behavior, disentangling a religiosity effect from a well-being effect. Our original identification strategy compares the stock market reaction to sukuk and bond issuance during the holy month of Ramadan, allowing for a differentiated stock market reaction to the religious component of a trade. Using the event study methodology, we measure abnormal returns for a sample of 2140 issuances by 133 issuers in Malaysia over the period 2000–2013. While we find evidence for both channels, sukuk issuance during Ramadan is valued more positively than bond issuance by stock market investors. Further, the positive reaction to sukuk issuance during Ramadan only rewards firms which issue sukuk exclusively. Our findings support the view that religiosity influences the behavior of investors, suggesting that this factor should be taken into account in the analysis of financial markets.
Original languageEnglish
Pages (from-to)50-62
Number of pages13
JournalJournal of Economic Behavior and Organization
Early online date14 Apr 2017
Publication statusPublished - Jun 2017

Bibliographical note

The authors thank Mustafa Disli, the Editor of the journal and the reviewers for their precious remarks


  • Behavioral finance
  • religion
  • Islamic finance
  • Ramadan effect


Dive into the research topics of 'Religiosity vs. well-being effects on investor behavior'. Together they form a unique fingerprint.

Cite this